“My mother is approaching 80 and still lives in the big two-story colonial in the country that she and my father built in 1967. It’s easy to understand why she wants to stay there; it’s all she’s known for 50 years. She’s been very independent until the past year or so. She can’t drive anymore and since she’s in the country, there’s no public transportation, so she relies on my brother or me to take her where she needs to go. Mom’s health is declining, so now a visiting nurse checks on her several times a week, but that’s still not enough. We worry constantly about her safety. We know Mom can’t stay put, so we’re trying to figure out the best solution.”
This is a story we often hear. One of the most important decisions that must be made at some point is where your parents should live as they grow older. Each type of housing option has its advantages and disadvantages. One may be better than another depending on your parents’ health, financial resources, closeness to family members, and the willingness to be involved in their care as they age.
Aging In Place
For many people, aging in place is the preferred choice. The reasons are numerous. The mortgage may be paid off, so the home is theirs, free and clear. Your parents raised a family in that house and no doubt there are endless fond memories for them and for you. The neighborhood is like an old shoe. Your parents know where to get their groceries, where their doctor’s office is, and where to get the car repaired. And then there’s the uncomfortable thought of packing up or downsizing the many possessions they’ve accumulated over the last 50 years to move into a smaller, unfamiliar place.
While change can be difficult, it is important to consider transitions as life stages and needs shift. At some point, your parents will likely need help with their care. One day, they will no longer be able to drive, so it’s important to consider their proximity to mass transportation or find out if family and friends would be willing to provide rides when needed. If your parent is alone, isolation is another factor to keep in mind. Though the home mortgage may be paid off, home maintenance requirements will need to be anticipated and handled. Roof, furnace, or window replacement must occur quickly when needs arise as defects to each can cause additional home damage, and the costs of maintenance can add up.
As your parents grow older, ensuring that your parents are meeting their own physical needs or receiving the supports they need will become a growing concern. Personal hygiene, meal preparation, and taking supplements are vital daily living skills necessary to their wellness. Hiring home healthcare workers may be an option, but those costs can easily run into the thousands each month. If your parents’ home is more than one story, it’s likely there will come a day when going up and down the stairs between floors will be impossible. Modifications may also be required to accommodate walkers and wheelchairs, and bathrooms will likely need to be remodeled. So, while aging in place is one option, it’s smart to also look ahead and consider how life may be further down the road.
One option for an alternative to aging in place is an age-restricted community. These neighborhoods can include apartments, condos, townhouses, or detached homes such as cottages. Usually this type of “active adult community” offers lots of recreational and educational opportunities but is not equipped to provide assisted living or nursing care on site. Most residents rely on their own vehicles for their transportation needs. While purchasing or renting one of these homes is typically no different than purchasing or renting any other home, it’s important to pay close attention to the fees that come with these communities. If your parents go this route, they will likely face new health-related challenges as they age and, down the road, will need to move into a facility that offers options for increasing care as needed.
Independent Living Communities
Independent living communities are another alternative. If your parents require or think they’ll require minor assistance with certain activities in the future, an independent-living community may be a good choice. Residents typically live in small apartments, condominiums, or duplex homes. The housing is generally compact and easy to navigate, with outdoor maintenance provided. Some independent housing communities provide a meal per day, housekeeping, and an activities program. In Maryland, your parents can expect to pay $3,000-$4,000 or more per month to live in one of the communities. Again, as your parents grow older, they will likely require a higher level of care than what’s provided at an independent living community.
Assisted-living facilities are a good choice if your parents need help with their daily activities. These facilities consist of small apartments with scaled-down kitchens or individual rooms. This housing option provides help with some of the activities of daily living, including aid with medications and medical services. Most have a group dining area and common areas for social and recreational activities. Staff is available 24 hours per day. Many assisted-living facilities are designed to accommodate further health changes such as a section for memory care to help those with Alzheimer’s disease or dementia. The average monthly cost for these facilities is $5,000 per month.
Apart from a hospital, a nursing home generally provides the highest level of care available. This includes help with daily living activities and medical care. Staying in a nursing home costs $10,500 per month on average; the price reflects the high level of medical help offered at nursing facilities.
Continuing Care Retirement Community (CCRC)
Another choice is a Continuing Care Retirement Community (CCRC). These communities include independent living, assisted living, and nursing home facilities on one campus. Once accepted, residents are often guaranteed a place to live and be cared for the rest of their lives. The communities are usually safe and well maintained. Medical staff and emergency personnel are available 24 hours day. Transportation within the community and to local shopping or doctor offices is often provided. The primary disadvantage is the cost. For a well-run community, your parents can expect to pay a $250,000 or more entry fee and monthly rent of $3,000-$4,000, on average. High-end communities that feel more like resort living may be substantially pricier. Some extra services or specialized needs will cost extra. And if your parents change their minds and want to move somewhere else, their initial investment may be to be forfeited.
FAI has an extensive library of resources covering everything from retirement planning to investments and more. The article above comes from one of our Aging Parents eBooks written by Mark Stinson, CPA, CFP®, MBA. If you have any questions, please reach out to Mark at email@example.com.
By Mark Stinson, CPA, CFP®, MBA
May 4, 2022